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Don’t worry too much about the prospects of Sino-US trade

The United States announced that starting from September 24, it will impose a 10% tariff on 200 billion US dollars of products from China until the end of the year, and the tax rate will rise to 25% from next year. At the same time, it threatened that if China strikes back, it will further expand its 'tax base.' However, under the leadership of infrastructure stocks, the Chinese stock market has become popular across the board, and there is no panic. Why is this? The Sino-US trade friction has attracted worldwide attention, and many people are worried about China's economy. Although this sentiment is expected and not unfounded, the facts show that it is completely unnecessary to be too pessimistic. Because the Sino-US trade friction has both negative and positive factors. If we make good use of the positive factors, in the long run, it will promote the development of China's economy with more quality. As a matter of fact, in order to maintain a stable economy and prevent risks, China has adopted a series of reform measures, especially in the case of sudden changes in the external market or facing uncertainties, through policy adjustments and comprehensive deepening of reform and opening up, and more Focusing on solving the bottlenecks that restrict its own economic and social development will effectively stimulate domestic demand and endogenous power. It is expected that reforms will be strengthened in the future, and everyone will benefit from this reform. From a recent point of view, the People's Bank of China continued to invest in the medium-term lending facility (MLF) in the market in September, and this week it expanded its MLF operations to 265 billion yuan, exceeding market expectations and releasing policy warmth. On the day when the US$200 billion tariff boots landed, the National Development and Reform Commission held a meeting to emphasize the shortcomings of infrastructure construction, prompting China's infrastructure stocks to lead the rise on Tuesday, which continued to heat up expectations for policy underpinnings. On that day, the entire stock market, led by infrastructure stocks, blew red across the board. Both the Shanghai Stock Exchange and the Shenzhen Component Index closed their biggest gains not seen in at least the past three weeks. On Wednesday, the Shanghai and Shenzhen stock markets continued to rise, with the three major indexes rising by more than 1%. An analyst at the research institute Fortuo also pointed out that China's adjustment of domestic policies to respond to the huge US tariffs has achieved initial results. After many rounds of negotiations, easing, and escalation of Sino-US trade frictions, the Chinese market’s expectations for external pressures have basically stabilized, and the focus is now gradually shifting to the implementation of China’s domestic policies to deal with external pressures. This may be because the Chinese stock market has not fallen but has risen One of the main reasons. In addition, from the perspective of the global exchange rate market, China’s series of statements also help stabilize the renminbi. Taking the US announcement of additional tariffs on US$200 billion of products from China as an example, the global market has risen, and investors have basically ignored the latest escalation of Sino-US trade frictions. On the one hand, the United States imposed a 10% tariff on US$200 billion of Chinese imports instead of the expected 25%, which also gave investors a sigh of relief. The market is optimistic that the two sides will return to the negotiating table to resolve the protracted trade dispute. On the other hand, China’s economy is already very large. Although the Sino-US trade friction has an impact on China’s economy, it will not hurt one's muscles and bones. In the foreseeable future, China will still be the engine of world economic growth. There is no doubt that , Sino-US trade friction will accelerate the process of China's reform and opening up, and the positive impact on the Chinese economy may be greater than the negative impact. It is true that the future of Sino-US trade friction will affect the relationship between the two countries, the key lies in whether the two sides can manage their differences and eliminate each other's misunderstandings and prejudices. If they all show open minds and can meet each other candidly, then there is no obstacle to getting past them. If any country wants to become a real power and convince the world, it must have the broad minds that a big country should have, and must adhere to the correct values u200bu200band codes of conduct, otherwise the people may betray their relatives. From the perspective of China and the United States, cooperation will benefit both, and struggle will hurt both, and there is no need to harm each other. Therefore, there is reason to believe that the future cooperation between the two sides will still be the mainstream, and the difficulties are only temporary, and there is no need to worry too much about the prospects of Sino-US trade. The purpose of the U.S. tariff stick is not to provoke a trade war with China. Its substantive purpose is to oppress the Chinese government to make concessions and compromises, thereby gaining bargaining chips. And the exchange of interests, so short-term concerns of the market are inevitable, but from a long-term perspective, China’s trade situation is bound to be positive.

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